Summary

In this module you learned about how operations management contributes to organizational success in business. Below is a summary of the key points covered.

Operations Management in Manufacturing and Production

Operations management is responsible for all the activities involved in transforming a concept into a finished product. Included in these activities are planning and controlling the systems that produce these goods and services.

Facility Layouts

The layout of a facility is most often determined by the product being manufactured. The four types of facility layouts are process, product, cellular, and fixed position.

Technology and Production of Goods

Just as technology has revolutionized the average home, it has also transformed the way products are manufactured. Using technologies such as CAD (computer-aided design), CAM (computer-aided manufacturing), CIM (computer-integrated manufacturing), flexible manufacturing and 3D printing companies are able to manufacture products faster and more efficiently.

Operations Management in Service Businesses

Even though service companies do not produce a tangible good, they require operations managers to help ensure that the services delivered are high-quality, timely, and cost-effective.

Scheduling Tools

A major part of operations planning is scheduling the various activities that go into the production process. Two tools that are used by operations managers to ensure that projects and tasks are completed on time are the Gantt and PERT charting methods.

Logistics and Supply Chain Management

Supply chain management refers to the management activities that maximize customer value and allow the company to gain a competitive advantage. It represents a conscious effort among firms to work in the most efficient ways possible. Supply chain activities cover everything from product development, sourcing of materials, actual production, and transportation logistics.

Quality of Goods and Services

The cost of poor quality can range from a small refund to a single, dissatisfied customer to global product recalls. In order to insure that their products, goods, and services meet consumer quality standards, companies can employ quality-control techniques such as Six Sigma, TQM, and SPC.

Synthesis

In this module you were given an overview of and some insight into the world of operations management and the key role it plays in delivering high-quality goods and services to customers. We can sum up operations management by saying that it’s the functional area within organizations that makes sure that the right customer gets the right product at the right time for the right price in a form that meets the customers’ quality expectations. It’s a pretty tall order, and it requires operations managers to be involved in every facet of the business process.

Regardless of how much marketplace demand there is for a given product, good, or service, if the organization cannot consistently deliver it, then consumers will either find a substitute or simply do without. Consider the following examples, and you’ll begin to register the impact of poor operations management:

Have you ever . . .

• Left a restaurant because the wait was too long or the service too slow?
• Returned an item to the store because it was defective or broke shortly after you bought it?
• Stayed in a hotel and vowed never to go there again because the hot water didn’t work or the room wasn’t clean?
• Attended a Thanksgiving dinner where the turkey was bone dry and the sweet potato pie was crunchy?

As you can see, breakdowns in operations management can be very disappointing to the consumer and costly to the organization!